The farmdoc team at the University of Illinois has created a model projecting the average fall price for corn and soybean futures in October. University of Illinois Agricultural Economist Gary Schnitkey says, at USDA’s current projected yields, it puts December corn futures at $3.10 and November Soybean futures at $8.36.
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Next week (June 30th) USDA will release the quarterly grain stocks report for corn. These numbers have not been updated since March. It will reflect consumption patterns during the coronavirus pandemic.
The third-quarter grain stocks number is important because it gives the trade an actual tally of how much corn is left from the total available supply in the United States. Early this month USDA projected about 5.7 billion bushels of corn would be used this marketing year in the feed and residual category. This is the one that has the most scrunch room in it. University of Illinois Extension Agricultural Economist Todd Hubbs says if the June stocks report shows 4.89 billion bushels left in the bin, then things are on track, “It will be on track and you make actually see feed and residual move up a little bit if it is in that range. We typically see a fourth quarter feed and residual higher than what that would imply for the third quarter or the first three quarters’ feed and residual use. So, it is on track with the possibility of USDA raising feed and residual numbers.”
The feed and residual number, of course, isn’t the only consumption category for corn. Ethanol took a big hit during the first two months of the pandemic shut down as people stayed home and cars sat idle. The ethanol grind was down 26.7 percent in March and April. It was off in May, too, says Hubbs, “I assume that we will see the kind of convergence rate we’ve seen under the last couple of months of the lockdown. I have the (month of) May number at around 308 million bushels which puts total use for the quarter at around 969 million bushels. Which is way down from what we would normally do in the third quarter of the marketing year.”
The third primary consumption category is the export of corn. Hubbs expects it to be about 1.2 billion in total for the first 9 months of the marketing year. When you total it all up, the exports and the domestic usage, third quarter consumption looks to be right at three-billion-bushels. Hubbs says that number would put June 1 stocks at 4.89 and that figure is less than what was on hand last year at this time, “We would have slightly lower (stocks of corn), about 300 million bushels lower. We must remember we had much smaller crop in the previous year than we did in 2019. So, we will have fewer bushels in the bin, but we won’t be using as many bushels as we did in the last marketing year.”
USDA will update the grain stocks report next Tuesday, June 30th at 11am central time.
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Farmers and retailers have been under pressure this season to get herbicides applied to soybeans and it has caused a lot of headaches. A Ninth Circuit Court of Appeals ruling caused a five-day pause in the application of three of the four available dicamba products. In Illinois, unlike other states, that pause was upheld and then the state tried to remedy the situation by adding five days to the application window - which now closes June 25th. Mostly it is going to be too hot spray during that time frame. Another regulation prohibits application on days warmer than 85 degrees says University of Illinois Extension Weed Scientist Aaron Hager, “Looking at the long term forecast from the National Weather Service, it looks like the next five days will be a no-spray situation. We’ve high temperatures well in excess of 85 degrees for today, Friday, Saturday, Sunday, and on into Monday. So, of the seven days we have left, it looks like on the extended forecast there may be only about two days.”
Regulations require the forecast to be checked within 24 hours of the intended application says the ILLINOIS Extension Weed Scientist, “The forecast can change over time but it looks like, at least for the next several days, we are going to have to leave the Dicamba sprayers parked.”
That’s for the Dicamba resistant soybeans. Other soybeans just look awful. There have been herbicide products for decades that burn the leaves of soybeans and then they grow out of it but this year’s damage is, well, in a word serve. Again, here’s ILLINOIS’ Aaron Hager, “A couple of possible reasons why that could be the case. 1) The environmental conditions, obviously, when these were applied. If they are applied under very warm air temperatures under bright sunshine we tend to see more soybean response compared with applications that happen under cooler and perhaps cloudy skies.”
The other possible explanation lies in the practice of adding a residual herbicide into the post-application herbicide mix. Hager says some of the residual herbicides could be acting in the tank mix like an additional crop oil. This would lead to a more rapid uptake of the herbicide and a consequently quick and extensive development of the burning leaf symptoms.
Returning to Dicamba soybeans. Illinois farmers unable to make applications by June 25th will need to use alternative products; Glyphosate, PPO inhibitors, or both. The problem is that waterhemp is likely to be resistant to one of the two, and maybe both. If that is the case, Aaron Hager says there are no good chemical options for the field.
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Dicamba herbicide products designed for use with GMO cotton and soybean have been pulled from the marketplace, or at least are in the process of being pulled. This is the result of a lawsuit filed by plaintiffs including the National Family Farm Coalition. Todd Gleason talked with the president of NFFC about the reasons why the farmer organization felt compelled to go to court to keep Dicamba, in this latest form, off the market.
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On May 15, 1862, Abraham Lincoln signed into law an act of Congress establishing “at the seat of Government of the United States a Department of Agriculture.” Two and one-half years later, in what was to be his last annual message to the Congress, Lincoln said: "The Agricultural Department, under the supervision of its present energetic and faithful head, is rapidly commending itself to the great and vital interest it was created to advance. It is precisely the people’s Department, in which they feel more directly concerned that in any other. I commend it to the continued attention and fostering care of Congress.
by Jonathan Coppess, Univesity of Illinois
There are more than 40 million Americans who have lost their jobs and more than 100,000 Americans have died in just a few months. The brutal killing of George Floyd adds another tragedy to a list already too extensive. With so much pain ripping through America today, the policy decisions by the Trump Administration in the food and agriculture sector are concerning. Too little has been done to assist those who need food in a pandemic and too much on trying to curtail access to food aid. These are decisions likely to produce long-lasting, deep reverberations in the body politic with consequences difficult to foresee. Farmers are struggling and payments can provide some help but the decision to prioritize payments over food is not likely to be well-received by the many waiting in long lines at food banks, struggling just to feed their families. Worse still the obvious greed of the few pushing to capture ever larger payments, especially when considered with the historical examples reviewed herein. This difficult legacy haunts every discussion about farm policy, never more so than now.
Concerns are not the equivalent of criticism for its own sake but rather a call for policies and decisions that better reflect needs and values. The failure to make real, incremental progress too often builds to a breaking point, causing vast harm and greater costs. Few words in American history are more haunting on this point than those of President Abraham Lincoln in his second inaugural address. Among them his warning to a war-weary citizenry that the fighting could continue “until all the wealth piled by the bond-man’s two hundred and fifty years of unrequited toil shall be sunk, and until every drop of blood drawn with the lash, shall be paid by another drawn with the sword” (Lincoln, April 10, 1865). For those willing to learn, the brief record highlighted here provides a starting point from which to draw important lessons.